Tuesday, August 08, 2017

The latest Employment Situation Report indicated that in July, net non-farm payrolls increased by 209,000 jobs overall with the private non-farm payrolls sub-component adding 205,000 jobs while the civilian unemployment rate declined to 4.3% over the same period.

Net private sector jobs increased 0.17% since last month climbing 1.68% above the level seen a year ago and climbing 7.08% above the peak level of employment seen in December 2007 prior to the Great Recession.

Workers unemployed 27 weeks or more increased to 1.785 million or 25.9% of all unemployed workers while the median term of unemployment increased to 10.6 weeks and the average stay on unemployment increased to 24.9 weeks.

The latest Employment Situation report showed that in July “total unemployment” including all marginally attached workers went flat at 8.6% while the traditionally reported unemployment rate declined to 4.3%.

The traditional unemployment rate is calculated from the monthly household survey results using a fairly explicit definition of “unemployed” (essentially unemployed and currently looking for full time employment) leaving many workers to be considered effectively “on the margin” either employed in part time work when full time is preferred or simply unemployed and no longer looking for work.

The Bureau of Labor Statistics considers “marginally attached” workers (including discouraged workers) and persons who have settled for part time employment to be “underutilized” labor.

The broadest view of unemployment would include both traditionally unemployed workers and all other underutilized workers.

To calculate the “total” rate of unemployment we would simply use this larger group rather than the smaller and more restrictive “unemployed” group used in the traditional unemployment rate calculation.